Can an Employer’s Unfavourable Reference Ground a Claim for Defamation?

May 2017

The Ontario Superior Court of Justice recently found an employee’s defamation claim against his previous employer for an unfavourable reference could not succeed, because the reference was justified and fell “within the range of qualified privilege”.

The facts

In Papp v. Stokes et al, 2017 ONSC 2357, the Ontario Superior Court of Justice considered a claim brought by Adam Papp for wrongful dismissal and defamation against his former employer, Stokes Economic Consulting Inc., and Ernest Stokes, the president of the company. Mr. Papp sought $65,000 in damages for wrongful dismissal, as well as $500,000 in damages for defamation; $200,000 in punitive, exemplary, and aggravated damages; and $30,000 in damages for intentional infliction of mental suffering.

Mr. Papp commenced employment with Stokes as a staff economist in March, 2011. His employment was terminated without cause in December, 2013. Following his termination, Mr. Papp asked Dr. Stokes whether he would act as a reference for a job application, and Dr. Stokes agreed.

In May of 2014, Mr. Papp applied for a job as a socio-economic statistician with the Yukon Government. At the conclusion of the interview process, Mr. Papp was the top ranked candidate for the job. The interviewer told Mr. Papp that she needed to check his references. Mr. Papp encouraged her to contact Dr. Stokes.

The interviewer spoke with Dr. Stokes. In response to the interviewer’s specific questions, Dr. Stokes stated that Mr. Papp did not get along well in a team setting, had a chip on his shoulder, and there was “no way” that Stokes would re-hire Mr. Papp. Mr. Papp was not offered the position with the Yukon Government as a result of the negative reference provided by Dr. Stokes.

At trial, Mr. Papp alleged that the negative reference was defamatory.

The decision

In its analysis, the Court applied the ordinary test for defamation, saying that Mr. Papp needed to prove:

that the words were defamatory, in the sense that they would tend to lower his reputation in the eyes of a reasonable person;

that the words referred to Mr. Papp; and

that the words were “published”, in the sense that they were communicated to at least one person other than Mr. Papp.

Mr. Papp easily satisfied the elements of the test, following which the onus shifted to the defendants to establish a defence to the claim. The defendants argued both that the negative reference was justified and that it fell within the defence of “qualified privilege”. They were successful in both arguments and fully defended the claim of defamation.

In respect of the justification defence, the defendants called evidence to prove that Mr. Papp was difficult, that his co-workers did not perceive him to be a team player, and that his co-workers believed he had a poor work ethic. Based on the evidence, the Court accepted that Dr. Stokes’ reference was substantially true, and the negative reference was therefore justified.

While the justification defence alone would have been sufficient to dispose of the defamation claim, the Court also found that the defence of qualified privilege applied. The Court confirmed that words that are “published” in the context of a reference check are protected by qualified privileged unless the plaintiff can establish malice or recklessness. As Mr. Papp failed to establish malice or recklessness on the part of the defendants, his defamation claim failed.

In the result, Mr. Papp was awarded damages in lieu of reasonable notice of termination, but the rest of his claim was dismissed.

What does this mean for employers?

This decision provides helpful guidance and comfort to employers who may be called upon to provide references for former employees.

If an employer can prove that a negative reference is substantially true, even where the employee was terminated without just cause, the employer can take advantage of the justification defence to any claim of defamation arising from the negative reference.

In addition, so long as the reference is not malicious or reckless, the defence of qualified privilege remains available to employers who provide truthful information about a former employee’s positive and negative attributes in response to a request for a reference.